Steve, they just wanted to know some sources for some of my posts on this subject; I provided them everything I had.
I think there are going to be several answers to this puzzle, but the main one will most likely be that the BLS missed the trend change.
In some ways that is good news. If this analysis is correct, then there won't be as many job losses coming since they have already been lost. So the impact is now and should be less in the future.
CR, nice try at diplomatic spin, but you really shouldn't try to be so generous. The fact is, if this has already been occurring, then there is quite a bit more to occur, "if you will", and that means we are pretty much in deep doo doo. By that, I mean that the weak economy we are already starting to see in the retail sales numbers has a long way to run, and this is clearly NOT the bottom, as many would like to believe.
This probably means the expected job losses have been occurring, but simply haven't been picked up in the initial BLS reports.
What about the jobless claims? The numbers seem at odds with the kind of job losses you'd expect from a "severe" housing downturn. Especially with a (reported) 1.3% GDP growth rate.
Something doesn't make sense here. It makes me think that a lot of people in the residential real estate industry aren't on payrolls, or that the economy is bifurcated and the financial sector is picking up the slack.
No doubt that some of those workers aren't eligible for unemployment, but the jobless claims (although much stronger in recent weeks) this year are above 2006 levels. Continuing claims are also elevated in 2007, so I wouldn't say the weakness isn't showing up in there at all.
As for the recent drop in claims, it could be that the losses are still showing up in there, but other industries are experiencing less churn.
The explosion of household debt is one of the top transformative changes in American society during our lifetime. In 2004, we crossed the line where one year of personal income would not pay off the total household debt. That is an incredible amount of debt.
Why compare debt to the amount of income? Consider there are basically three general pots to which we can devote current income: current consumption, savings, or repayment of past obligations. As past obligations become larger, the pressure to cut current consumption or savings grows. We already have seen a decline in the savings rate.
Well, that's putting it mildly. There is no savings rate. It's negative.
Is the phenomenon depicted in this post a case of the slopes of the curves being so unprecedented that information is having trouble "catching up"?
In other words, is this like looking at a car involved an auto accident in which one side of the car still looks okay, but the driver's body is hanging out of the other, totally demolished, side?
Geoff's right... even though we aren't yet seeing data on the job losses that should accompany the obvious downturn in construction, that doesn't somehow preclude greater losses later on (inside or out of the REIC). Job losses tend to self-reinforcing. It's not like contractors are going to immediately find work as stockbrokers, either.
There is a skills shortage in the US. Be it drivers or whatever. Many construction workers can easily find employment. Many construction workers are highly intelligent folk who prefer outside work....if they have to they go back to the dreaded office.
As mentioned elsewhere. If you get laid off in December and then got a job in February and then get laid off again you dont count in the newly created section of the stats. Something like that.
Many builders are not intimidated by the current environment, they still see profits and are still building. All the ilegals and causals could go from the scene and leave the documented ones to carry on with no impact in stats.
Bottom line......it takes a long time for housing recessions to work into the economy. Doom and gloomers just need to be more patient:-)
"The ascendance and dominance of capital vs. labor. Add a billion or so potential workers to the global labor force, blend in a technology S curve acceleration, combine these with deregulation, lower taxes, and free trade, and you have a recipe for accelerating returns to capital and diminishing returns to labor. Higher stock prices, lower inflation, declining interest rates and importantly a rather low volatility environment for both economic growth and asset prices have resulted. Its known as the great moderation in economic circles, assisted not insignificantly by what has been called Bretton Woods II, a recirculation of surplus reserves into consuming nations that has promoted growth and lower interest rates no mean feat in historical context."
And that's just a SMALL SAMPLE of his enthusiam. Read the entire text keeping in mind the context that it is being written by the rim Reaper himself - UNBELIEVABLE.
We started out by suggesting the potential for a Dr. Strangelove world, and our conclusions suggest we may get it. Da bomb in the form of sustainable global growth with perhaps an early cyclical slowdown appears to be the likeliest outcome. Those who own this growth as opposed to those who lend to it will benefit. We will attempt to position ourselves to exploit this secular change in emerging economies, mindful of our roots as well as the inherent risks in the world of levered finance that is flocking to be like Harvard or Yale during a period of rising valuations. That suggests increasing scrutiny of not only economic growth, but the prices of assets that discount such growth. Hopefully at the end of our secular timeframe in 2012 we will be shouting Wahoo! like our boy Slim Pickens. It promises to be quite a ride. And as always, we thank you, our clients, for your trust and the opportunity to express all of the views expressed in this Outlook. If we worry about one thing its your satisfaction with our performance. Let it always be thus.
Does anyone have a decoder ring for that last post? There must be some sort of hidden message, no one after all would follow backlinks onto a random blog to post a paragraph of nonsensical clichés.
I am with you. Along with Richard Russell's conversion and Buffett getting off his duff and buying up RAILS right here, I have to wonder WTF is going on.
All of the speculative dollar buying due to the belief that China would float the yuan, they widen the band by .2%, speculators are about to get their arses handed to them.
China's band widening is going to be like all their other band widenings. A Non event. I don't see this having any effect on anything.
All of the speculative dollar buying due to the belief that China would float the yuan, they widen the band by .2%, speculators are about to get their arses handed to them.
I don't get it. If China floated the Yuan, wouldn't this be bad for the USD?
CR wrote: "If this analysis is correct, then there won't be as many job losses coming since they have already been lost. So the impact is now and should be less in the future."
It depends on whether starts and completions continue to decline at this rate. I think the metro vacancy rates suggest that they have considerably further to fall. In that case, I'd expect the losses in residential employment to continue at an ever increasing rate for at least another quarter. And they'll be higher than the ~100,000 listed for 3rdQ 2006, and at some point the absorption rate into other jobs will become less too. That might explain some of what we are already seeing on auto sales and retail.
Congratulations on a good job, CR, but in some ways this is like a suspense novel - each bit of information that can be correlated is still increasing the uncertainty range.
Its possible that starts stabilize here, but for different reasons that the bulls believe.
Inventoried land is a sunk cost, and the marginal cost of production for a house is the structure and site development. In a declining HPA environment, builders have an incentive to produce spec starts as long as the home price is above this s.t. marginal cost.
The first reaction of builders to a slump is to hold back starts in the hope of a short term improvement in the market. This may have explained the initial decline in starts.
Once expectations of negative HPA set in, however, builders maximize profits by building and selling as much of their land inventory as possible, as soon as possible, as long as the home price is above the cost of the structure. Starts would then stabilize or even rise.
Once the land inventory is burned off, builders would face a higher long-term marginal cost that includes newly purchased land. They would hold off on these purchases and starts would collapse in a step-function manner.
The above is an idealized model. Some biulders have no land inventory, and unpermitted land in a high-regulation state has a higher s.t. marginal cost than permitted land, and this also comes into play. But generally, the economics of the model are pretty clear: starts should stabilize before falling steeply, and the bulk of employment losses will come at this later stage.
I've come to the conclusion that BLS employment data is fairly usless, except maybe as a backward looking check to see with the benefit of hindsight whether the world alligns with a given view.
Dependable data isn't avialable until well past its usefulness for any kind of forecasting purposes. This must be why employment is always referred to as a laaging indicator.
Someone please correct me if I'm wrong, but if I read this release correctly, 19,000 jobs were created in the third quarter, where GDP was 2.0%.
Do these revisions track the household survey any better than the establishment survey? If so, wasn't April's household survey showing a massive loss of jobs, like 400,000?
Just to be clear, this is a revision of the establishment survey right? And basically NO jobs were created in the entire 3rd quarter??? Was the birth/death model just wildly off or what?
Insurance Guy said: "I've come to the conclusion that BLS employment data is fairly usless, except maybe as a backward looking check to see with the benefit of hindsight whether the world aligns with a given view."
JMO, but it all depends on how fine a point you put on it. If you're trying to forecast job growth down to a specific number, it's tough. If you're just trying to determine whether job growth is expanding within a normal range or contracting, it's a lot easier.
The "swings" in the government-sourced data I use typically aren't significant, and this particular one isn't either, especially when you consider that nonfarm payroll is up around 140 million people.
This probably means the expected job losses have been occurring, but simply haven't been picked up in the initial BLS reports.
If the BLS is missing thousands of job losses, the MBA is overstating purchase applications and the median house prices become useless, what statistics can be tracked with confidence?
So the survey overstated job growth in the HB construction industry, which I suspected, now the other issue is why? part of the answer maybe that HB construction technology has significantly impacted the number of workers required to build homes and this technology has not yet been fully intergrated into the BLS model.
This combined with illegal's and the impact of subcontractors could all swing the numbers.
We are growing extremely negative on credit markets, which we see as in a bubble," Tim Bond, head of asset allocation at Barclays Capital in London, wrote this week. "U.S. companies are releveraging aggressively in an attempt to substitute earnings-per-share growth for earnings growth. 2008 should see a fairly savage bear market for credit, a large rise in defaults and an end to easy liquidity conditions."
Dresdner Kleinwort's analysts, led by Willem Sels, the head of credit strategy, in London, scrutinized U.S. earnings growth in the past quarter. They concluded that the average figure of 12.5 percent was misleading because it measured earnings per share and was distorted by stock buybacks.
Profit growth for the companies in the Standard & Poor's 500 index is just 9 percent, and 3 percent for all U.S. companies. "With net debt growing at 10 percent, leverage ratios are deteriorating," the Dresdner team wrote in a report this week. "Clearly this is not in line with unchanged credit spreads."
part of the answer maybe that HB construction technology has significantly impacted the number of workers required to build homes and this technology has not yet been fully intergrated into the BLS model.
be the new programmable nail guns that are voiced controlled to assemble the walls that used to be done by those so inefficient 'material movers' who could barely speak English, or the instant bolt together house that is delivered in 6 pc to your site and assembled by other material movers?
Somewhat seriously, the labor hr/sq ft should have decreased marginally (~2%), unlike the labor hr/housing unit which we know has grown far faster than 2%...owing to the fact that even though the divorce rates are up (really?), people need more square feet.
At the bottom of my street there is a pool of day labor every morning and all day on the weekends. I've noticed that over the past 6 months the numbers have grown a lot and even more interesting the average age and size of any given individual has shifted. There are now many many more 20 & 30 year olds who look like the might have been carpenters. Of course my perception became a little skewed when I saw a group with tool belts....
"I don't get it. If China floated the Yuan, wouldn't this be bad for the USD?"
Yes, very much so. Also, this is not a non-event, but is a sign that the Bretton Woods II regime is breaking apart. Bill Gross is being less than forthcoming when speaking about Bretton Woods II and how this will continue to be a boon for bonds. China has a real problem on their hands with all of these recycled dollars coming back into their economy in the form of private equity. The Chinese CB knows this and is concerned about it. They also know that this is the real source of the melt-up problem, and that the homegrown speculative bubble is really just a pile-on effect by Chinese JULS gamblers. Congress critters talking about protectionism and all of the Paulson meetings in the world would never get China to break the peg. A runaway melt-up, however, will get China to break the peg now that they see there is a downside to all of this recycling. The slower the real US economy gets, the bigger the China bubble gets and there is no way to stop the dynamic without breaking the peg. I would look for the Yen to follow Yuan higher as the Asian currency regime crashes on the rocks. Look for much higher durable goods inflation (which directly affects the current incarnation of the CPI), much higher interest rates, and a much lower stock market. I could easily see $100 shoes at Walmart instead of $12 shoes, and 15% mortgages once things are priced more accurately. Anyone that doubts this should look at what the stock market does every time the Yen rallies hard. The days of FCB price-insensitive risklove purchases of old-maid cards are numbered.
So the result of all of that labor data mining is just that little green line, which without multiple HERE IT IS arrows would be completely invisible? Thats where 600,000 construction jobs were lost?
This was also in the news. FICO is to be revised "in order to more accurately gauage" the credit worthiness of the type of individual that typically resorts to the subprime market. That's sort of a paraphrase of what I remember readeing. In the LA Times. Don't have any links to this.
I thought we had already established that the missing lost jobs were in a barn in mid TN where illegal whiskey in distilled, unnatural farm animals are bred and black helicopters are parked.
Carson(Domestic Decoupling: Construction Industry Survives Housing Slump)
:
The pattern within the construction industry is unique. Never before have the nonresidential and public construction segments decoupled from the ups and downs of the housing sector. Increasing current spending and new contracts in nonresidential and public construction, which
together exceed residential housing, helps explain why job losses in the construction industry have been held to a minimum in this cycle. It also lends credence to the Federal Reserves view that the subprime
market meltdown was primarily a function of loose lending standards and not directly tied to interest-rate policy.
CR,
Can you tell us a little more about the Fed researchers that contacted you? What did they ask?
Steve, he said it was a release by the BLS. It's in the text.
Steve, they just wanted to know some sources for some of my posts on this subject; I provided them everything I had.
I think there are going to be several answers to this puzzle, but the main one will most likely be that the BLS missed the trend change.
In some ways that is good news. If this analysis is correct, then there won't be as many job losses coming since they have already been lost. So the impact is now and should be less in the future.
Best Wishes.
copied
Fed chairman does not want more regulations. Fed chair takes a go-slow stance on subprime regulation - May. 17, 2007
The prblems are: (to name just a few)
Fraudulant cash-back-at-closing deals that inflated prices.
Appraisers that inflated values to make room in the loan for the fraudulant cash-back deals.
Realtors that knew there was mass fraud, but ignored it as inflated prices meant inflated comissions.
Leanders that knew there were fraudulent deals, inflating prices, but didnt care.
Speculators that rushed in.
Lenders that gave loans to speculators.
Home improvement tv shows that didnt check the facts of all the flip deals.
Lenders that continued to offer crazy credit, even after signs the market was topping.
Politicians that watched it all happen, and ignored it because higher prices means higher property taxes.
The American population that saw it happening (me included), but didnt shout out loudly enough to make it stop.
More?
CR, nice try at diplomatic spin, but you really shouldn't try to be so generous. The fact is, if this has already been occurring, then there is quite a bit more to occur, "if you will", and that means we are pretty much in deep doo doo. By that, I mean that the weak economy we are already starting to see in the retail sales numbers has a long way to run, and this is clearly NOT the bottom, as many would like to believe.
This probably means the expected job losses have been occurring, but simply haven't been picked up in the initial BLS reports.
What about the jobless claims? The numbers seem at odds with the kind of job losses you'd expect from a "severe" housing downturn. Especially with a (reported) 1.3% GDP growth rate.
Something doesn't make sense here. It makes me think that a lot of people in the residential real estate industry aren't on payrolls, or that the economy is bifurcated and the financial sector is picking up the slack.
ac,
No doubt that some of those workers aren't eligible for unemployment, but the jobless claims (although much stronger in recent weeks) this year are above 2006 levels. Continuing claims are also elevated in 2007, so I wouldn't say the weakness isn't showing up in there at all.
As for the recent drop in claims, it could be that the losses are still showing up in there, but other industries are experiencing less churn.
Great quote from another great blog:
The explosion of household debt is one of the top transformative changes in American society during our lifetime. In 2004, we crossed the line where one year of personal income would not pay off the total household debt. That is an incredible amount of debt.
Why compare debt to the amount of income? Consider there are basically three general pots to which we can devote current income: current consumption, savings, or repayment of past obligations. As past obligations become larger, the pressure to cut current consumption or savings grows. We already have seen a decline in the savings rate.
Well, that's putting it mildly. There is no savings rate. It's negative.
from Credit Slips
Sorry to have gone off-topic.
Here's an on-topic comment/question.
Is the phenomenon depicted in this post a case of the slopes of the curves being so unprecedented that information is having trouble "catching up"?
In other words, is this like looking at a car involved an auto accident in which one side of the car still looks okay, but the driver's body is hanging out of the other, totally demolished, side?
Geoff's right... even though we aren't yet seeing data on the job losses that should accompany the obvious downturn in construction, that doesn't somehow preclude greater losses later on (inside or out of the REIC). Job losses tend to self-reinforcing. It's not like contractors are going to immediately find work as stockbrokers, either.
Factors masking job losses could be:
Bottom line......it takes a long time for housing recessions to work into the economy. Doom and gloomers just need to be more patient:-)
The household survey was created because stats did not represent the real job market of many who are self employed.
When it showed job growth everyone was happy. Now what does it show ?
Has the Bond King EVER been this bullish?
PIMCO - Investment Outlook- May/June 2007 "How We Learned to Stop Worrying (so much) and Love 'Da Bomb'"
"The ascendance and dominance of capital vs. labor. Add a billion or so potential workers to the global labor force, blend in a technology S curve acceleration, combine these with deregulation, lower taxes, and free trade, and you have a recipe for accelerating returns to capital and diminishing returns to labor. Higher stock prices, lower inflation, declining interest rates and importantly a rather low volatility environment for both economic growth and asset prices have resulted. Its known as the great moderation in economic circles, assisted not insignificantly by what has been called Bretton Woods II, a recirculation of surplus reserves into consuming nations that has promoted growth and lower interest rates no mean feat in historical context."
And that's just a SMALL SAMPLE of his enthusiam. Read the entire text keeping in mind the context that it is being written by the rim Reaper himself - UNBELIEVABLE.
PE and LBO'e under scrutiny-
Fed, Other Regulators Turn Attention to Risk In Banks' LBO Lending - WSJ.com
Bill Gross's outlook thru 2012:
"Conclusions
We started out by suggesting the potential for a Dr. Strangelove world, and our conclusions suggest we may get it. Da bomb in the form of sustainable global growth with perhaps an early cyclical slowdown appears to be the likeliest outcome. Those who own this growth as opposed to those who lend to it will benefit. We will attempt to position ourselves to exploit this secular change in emerging economies, mindful of our roots as well as the inherent risks in the world of levered finance that is flocking to be like Harvard or Yale during a period of rising valuations. That suggests increasing scrutiny of not only economic growth, but the prices of assets that discount such growth. Hopefully at the end of our secular timeframe in 2012 we will be shouting Wahoo! like our boy Slim Pickens. It promises to be quite a ride. And as always, we thank you, our clients, for your trust and the opportunity to express all of the views expressed in this Outlook. If we worry about one thing its your satisfaction with our performance. Let it always be thus.
William H. Gross
Managing Director"
CR,
I will give it to you for holding your line against mounting evidence that contradicted your theory!
Does anyone have a decoder ring for that last post? There must be some sort of hidden message, no one after all would follow backlinks onto a random blog to post a paragraph of nonsensical clichés.
Sorry Reichman, thought for a second that it actually was William H Gross on the blog...
CR/Others,
Has the Fed ever revised downwards by such a magnitude?
Aren't we at risk of hitting a grey bar if Bernanke holds off on rate cut until the October report?
wahlberg-
I am with you. Along with Richard Russell's conversion and Buffett getting off his duff and buying up RAILS right here, I have to wonder WTF is going on.
All of the speculative dollar buying due to the belief that China would float the yuan, they widen the band by .2%, speculators are about to get their arses handed to them.
China Lets Yuan Rise Faster Before Paulson Meeting (Update3) - Bloomberg.com
RC:
China will not take one step.
Next the band will be +- 1%
in few month +- 2%
later +- 4%, 6%, 10%
and at some point when it will be "within the band " for a long time they would remove it all together.
see this at the end China Widens Yuan Trading Band, Boosts Flexibility (Update5) - Bloomberg.com
Yal,
more tokens, more protectionistic rhetoric coming, and dollar weakness.
China's band widening is going to be like all their other band widenings. A Non event. I don't see this having any effect on anything.
All of the speculative dollar buying due to the belief that China would float the yuan, they widen the band by .2%, speculators are about to get their arses handed to them.
I don't get it. If China floated the Yuan, wouldn't this be bad for the USD?
CR wrote: "If this analysis is correct, then there won't be as many job losses coming since they have already been lost. So the impact is now and should be less in the future."
It depends on whether starts and completions continue to decline at this rate. I think the metro vacancy rates suggest that they have considerably further to fall. In that case, I'd expect the losses in residential employment to continue at an ever increasing rate for at least another quarter. And they'll be higher than the ~100,000 listed for 3rdQ 2006, and at some point the absorption rate into other jobs will become less too. That might explain some of what we are already seeing on auto sales and retail.
Congratulations on a good job, CR, but in some ways this is like a suspense novel - each bit of information that can be correlated is still increasing the uncertainty range.
Wahlberg
"Read the entire text keeping in mind the context that it is being written by the rim Reaper himself - UNBELIEVABLE."
The rim Reaper? Maybe you are actually believing this story and are imagining a Bottom Harvest for bulls?
Its possible that starts stabilize here, but for different reasons that the bulls believe.
Inventoried land is a sunk cost, and the marginal cost of production for a house is the structure and site development. In a declining HPA environment, builders have an incentive to produce spec starts as long as the home price is above this s.t. marginal cost.
The first reaction of builders to a slump is to hold back starts in the hope of a short term improvement in the market. This may have explained the initial decline in starts.
Once expectations of negative HPA set in, however, builders maximize profits by building and selling as much of their land inventory as possible, as soon as possible, as long as the home price is above the cost of the structure. Starts would then stabilize or even rise.
Once the land inventory is burned off, builders would face a higher long-term marginal cost that includes newly purchased land. They would hold off on these purchases and starts would collapse in a step-function manner.
The above is an idealized model. Some biulders have no land inventory, and unpermitted land in a high-regulation state has a higher s.t. marginal cost than permitted land, and this also comes into play. But generally, the economics of the model are pretty clear: starts should stabilize before falling steeply, and the bulk of employment losses will come at this later stage.
I've come to the conclusion that BLS employment data is fairly usless, except maybe as a backward looking check to see with the benefit of hindsight whether the world alligns with a given view.
Dependable data isn't avialable until well past its usefulness for any kind of forecasting purposes. This must be why employment is always referred to as a laaging indicator.
With all those revisions we'll find out soon that we already had a recession last year and now this is the next cycle booming
Theroxylandr, from your mouth to the Econo-deities' ears!!!!!
I am still hoping for some sort of small-business pickup to moderate this series of unfortunate trends. We'll see.
Someone please correct me if I'm wrong, but if I read this release correctly, 19,000 jobs were created in the third quarter, where GDP was 2.0%.
Do these revisions track the household survey any better than the establishment survey? If so, wasn't April's household survey showing a massive loss of jobs, like 400,000?
Just to be clear, this is a revision of the establishment survey right? And basically NO jobs were created in the entire 3rd quarter??? Was the birth/death model just wildly off or what?
Insurance Guy said: "I've come to the conclusion that BLS employment data is fairly usless, except maybe as a backward looking check to see with the benefit of hindsight whether the world aligns with a given view."
JMO, but it all depends on how fine a point you put on it. If you're trying to forecast job growth down to a specific number, it's tough. If you're just trying to determine whether job growth is expanding within a normal range or contracting, it's a lot easier.
The "swings" in the government-sourced data I use typically aren't significant, and this particular one isn't either, especially when you consider that nonfarm payroll is up around 140 million people.
Sebastia
This probably means the expected job losses have been occurring, but simply haven't been picked up in the initial BLS reports.
If the BLS is missing thousands of job losses, the MBA is overstating purchase applications and the median house prices become useless, what statistics can be tracked with confidence?
So the survey overstated job growth in the HB construction industry, which I suspected, now the other issue is why? part of the answer maybe that HB construction technology has significantly impacted the number of workers required to build homes and this technology has not yet been fully intergrated into the BLS model.
This combined with illegal's and the impact of subcontractors could all swing the numbers.
Bravo, CR! Ritholtz and the others will be all over this.
We are growing extremely negative on credit markets, which we see as in a bubble," Tim Bond, head of asset allocation at Barclays Capital in London, wrote this week. "U.S. companies are releveraging aggressively in an attempt to substitute earnings-per-share growth for earnings growth. 2008 should see a fairly savage bear market for credit, a large rise in defaults and an end to easy liquidity conditions."
Dresdner Kleinwort's analysts, led by Willem Sels, the head of credit strategy, in London, scrutinized U.S. earnings growth in the past quarter. They concluded that the average figure of 12.5 percent was misleading because it measured earnings per share and was distorted by stock buybacks.
Profit growth for the companies in the Standard & Poor's 500 index is just 9 percent, and 3 percent for all U.S. companies. "With net debt growing at 10 percent, leverage ratios are deteriorating," the Dresdner team wrote in a report this week. "Clearly this is not in line with unchanged credit spreads."
Barclays...
Ah, ron would this
part of the answer maybe that HB construction technology has significantly impacted the number of workers required to build homes and this technology has not yet been fully intergrated into the BLS model.
be the new programmable nail guns that are voiced controlled to assemble the walls that used to be done by those so inefficient 'material movers' who could barely speak English, or the instant bolt together house that is delivered in 6 pc to your site and assembled by other material movers?
Somewhat seriously, the labor hr/sq ft should have decreased marginally (~2%), unlike the labor hr/housing unit which we know has grown far faster than 2%...owing to the fact that even though the divorce rates are up (really?), people need more square feet.
At the bottom of my street there is a pool of day labor every morning and all day on the weekends. I've noticed that over the past 6 months the numbers have grown a lot and even more interesting the average age and size of any given individual has shifted. There are now many many more 20 & 30 year olds who look like the might have been carpenters. Of course my perception became a little skewed when I saw a group with tool belts....
Divorce rates are at their lowest point in a generation.
Then again, so are marriage rates.
Short-term volatility seen for China markets
| Reuters
CR- "Based on the BED data, construction employment was overstated by 111K during Q3 2006."
CR, I see in the report where it talks about a net loss of 77,000. How do you get the 111K figure?
"I don't get it. If China floated the Yuan, wouldn't this be bad for the USD?"
Yes, very much so. Also, this is not a non-event, but is a sign that the Bretton Woods II regime is breaking apart. Bill Gross is being less than forthcoming when speaking about Bretton Woods II and how this will continue to be a boon for bonds. China has a real problem on their hands with all of these recycled dollars coming back into their economy in the form of private equity. The Chinese CB knows this and is concerned about it. They also know that this is the real source of the melt-up problem, and that the homegrown speculative bubble is really just a pile-on effect by Chinese JULS gamblers. Congress critters talking about protectionism and all of the Paulson meetings in the world would never get China to break the peg. A runaway melt-up, however, will get China to break the peg now that they see there is a downside to all of this recycling. The slower the real US economy gets, the bigger the China bubble gets and there is no way to stop the dynamic without breaking the peg. I would look for the Yen to follow Yuan higher as the Asian currency regime crashes on the rocks. Look for much higher durable goods inflation (which directly affects the current incarnation of the CPI), much higher interest rates, and a much lower stock market. I could easily see $100 shoes at Walmart instead of $12 shoes, and 15% mortgages once things are priced more accurately. Anyone that doubts this should look at what the stock market does every time the Yen rallies hard. The days of FCB price-insensitive risklove purchases of old-maid cards are numbered.
So the result of all of that labor data mining is just that little green line, which without multiple HERE IT IS arrows would be completely invisible? Thats where 600,000 construction jobs were lost?
PIMCO & GREENSPAN
Didn't anyone notice the news about PIMCO hiring Greenspan on as a "special consultant"? Talk about "sleeping with the enemy"!
FICO TO BE REVISED
This was also in the news. FICO is to be revised "in order to more accurately gauage" the credit worthiness of the type of individual that typically resorts to the subprime market. That's sort of a paraphrase of what I remember readeing. In the LA Times. Don't have any links to this.
With enough adjustments, of course, the numbers will be seen to have been correct all along.
I thought we had already established that the missing lost jobs were in a barn in mid TN where illegal whiskey in distilled, unnatural farm animals are bred and black helicopters are parked.
CR,
Carson(Domestic Decoupling: Construction Industry Survives Housing Slump)
:
The pattern within the construction industry is unique. Never before have the nonresidential and public construction segments decoupled from the ups and downs of the housing sector. Increasing current spending and new contracts in nonresidential and public construction, which
together exceed residential housing, helps explain why job losses in the construction industry have been held to a minimum in this cycle. It also lends credence to the Federal Reserves view that the subprime
market meltdown was primarily a function of loose lending standards and not directly tied to interest-rate policy.
http://www.alliancebernstein.com/CmsObjectABD/PDF/EconomicPerspectives/REPUS_070521_JC.pdf